The Bull is Bullish on CleanTech… So?


According to Steven Milunovich, Merrill Lynch’s cleantech strategist, energy concerns will not disappear despite the falling price of oil, so investors can expect significant long-term opportunities in the cleantech space.  That is reassuring for us, but not big news. What is surprising is the commotion on the wire by their announcement.

Mr. Milunovich hypothesizes (like many of our readers I would think) that the sixth technology revolution will be driven by clean technology. He profesizes (is that a word?) a push to renewable resources given the problems of global warming, energy dependence, and scarcity of fossil fuels – yes… all good stuff – but it seems that CleanTech being officially recognized and promoted by a troubled, yet established, Investment Bank is news that deserves wide announcement that gets all over the news wires all of a sudden. David Edwards, formerly at Morgan Stanley now at Vantage Point Venture Partners, and his replacement Nick Allen and his team be been making the same (loud) calls for the last few years. I think it is strange that all the hubbub came out of yesterday’s announcement – I suppose reporters and the public are out searching for any good news and Merrill provided it when they needed it most.

Like Morgan Stanley, Renewable Analytics and Piper Jaffrey, Merrill feels that current pressure on cleantech stocks may continue for now, but the combination of friendlier government policies and economic improvement should lead to investment opportunities in 2010-11.  Mr. Milunovich and the rest of the bunch is bullish on cleantech in the long term.

“History shows that technology revolutions occur about every 50 years. We believe cleantech is at the beginning of a high-growth period much like computing was in the early 1970s. The application of technology to resource problems should cause profound changes in the energy, utility, and automotive industries.” said Mr. Milunovich.

A decent thesis, nothing ground breaking; below are the Highlights (read the release here)

Energy Efficiency a Large Opportunity

Cleantech Could Help Decentralize the Energy Economy

The Disruptive Role of Venture Capital

Portfolio Approach the Likely Cleantech Investment Strategy

Image: Courtesy of Merrill Lynch – ml.com

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2 comments on “The Bull is Bullish on CleanTech… So?

Bryan

Any thoughts on Mr. Milunovich’s hypothesis regarding “decentralized energy generation” and “microgrids.” I understand the point, but my impression was overhauling our outdated transmission lines and grids to create higher capacity, more centralized distribution systems would be necessary to utilize massive solar plants, wind farms, etc. A transportation system much more reliant on plug-in (hybrid) vehicles would also need newer, more powerful, centralized grids and transmission lines, no?

Lili

>>my impression was overhauling our outdated transmission lines and grids to >>create higher capacity, more centralized distribution systems would be >>necessary to utilize massive solar plants, wind farms, etc

I don’t think so. The point will be to create new grids that utilize IT technology to feed load data back to the utility and to manage “peer to peer” transactions – say multiple homes w/ PV installation that are feeding into the grid or plug-ins. Yes we need new grid infrastructure to reach areas with renewable resources (eg. wind-rich tribal lands in the Dakotas)but power generation will be much less “centralized.” In fact Xcel has told us here in Boulder, CO – recently chosen for their new Smart Grid experiment – that in future they imagine themselves as an energy broker, not as a centralized energy generator as they are now.

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